Transcript 12.3 Prosperity and Panic Notes

Prosperity and Panic
Chapter 12 Section 3
Be able to summarize the effects of Jackson’s
policies on the United States economy, and
how they led to a financial collapse
Jackson Targets the National Bank
• President Jackson believed that the 2nd Bank of
the United States was unconstitutional.
– Even though the Supreme Court had
declared that it was.
– Jackson believed the Bank was too powerful
• It made loans to members of congress and
could have to much influence over them.
• Nicholas Biddle the Bank’s President set
policies that controlled the United States
money supply.
Jackson’s War on the Bank
• When Biddle requested that Congress renew the Bank’s
Charter in 1832, Jackson vetoed it.
• Jackson used the Bank as the main issue of the election
of 1832
– He portrayed himself as the defender of the people
– Jackson said the bank was a monopoly that favored
the few at the expense of the many.
– He won the election over the National Republican
(Whig) Candidate Henry Clay in a land slide 219
electoral votes to 49.
• Jackson then set out to destroy the Bank.
– He moved government funds into state banks
– Biddle fought back making it harder to borrow money.
– This eventually causes the bank to go out of business
but ruins the Nation’s Economy in the process.
Prosperity to Panic
• With the National Bank gone Jackson requested
that the state banks make it easier to borrow
money.
• The State Banks issued too much paper money.
– Which caused inflation because with too much
paper money in the system each dollar was not
worth as much and could not buy as much as
before.
– Then Jackson required people who bought
public lands to pay in gold or silver.
• As a result many banks ran out of gold and
silver when people exchanged their paper
money.
Prosperity to Panic continued
– When Martin Van Buren took office in 1837 the
balloon of an economy that Jackson had created
burst and caused the Panic of 1837.
– The Country entered an economic depression
• Many Banks Closed without gold and silver
• Almost all factories in the East closed
• Jobless workers when hungry and homeless
The Rise of the Whigs (Party)
• The Whig party was created by Henry Clay, Daniel Webster,
and other opponents of Jackson
– Named after British party that opposed royal power.
– The Whigs opposed the concentration of power in the chief
executive “King Andrew”
• Used Jackson’s Strategy against Van Buren and called
him a wealthy elitist
• The Whigs also said that Van Buren could have done
more during the Panic of 1837.
– The Whigs nominated William Henry Harrison for President
and John Tyler his running mate.
• Harrison ran on his War Record
• used his lack of political experience as a strength
• And that he was a Farmer and Frontiersman to get
Westerners to vote for him
– Harrison died shortly after his inauguration
• John Tyler served as president